To configure an L2TP tunnel on a Cisco router you can use this template configuration:
! Configure a pseudowire class and link it to your external interface for the tunnel
!
pseudowire-class CORE_TRANSIT
encapsulation l2tpv2
ip local interface GigabitEthernet1
!
! If you are leasing an IP address from Core Transit you can configure it as a loopback
! for testing/validation. Only use this if we are routing the IP address to you vs
! assigning it to the L2TP interface
!
interface Loopback0
ip address 216.146.17.15 255.255.255.255
!
! The external interface can be DHCP or statically configured
!
interface GigabitEthernet1
ip address dhcp
negotiation auto
no mop enabled
no mop sysid
!
! Note, 216.146.19.255 is the IP address for peering1.dfw1.coretransit.io. Your tunnel
! server IP may differ per region.
!
interface Virtual-PPP1
description L2TP interface
ip address negotiated
ppp chap hostname <username>
ppp chap password 0 <password>
ppp direction callout
ppp ipcp address accept
pseudowire 216.146.19.255 1 encapsulation l2tpv2 pw-class CORE_TRANSIT
!
!
! Route traffic into the tunnel with a static route, policy route, etc
!
ip route x.x.x.x y.y.y.y Virtual-PPP1
Also, note that if you would like your L2TP tunnel to be establish into a separate VRF then the underlying connection you will want to add the ` vrf forwarding <vrf name>` command under the Virtual-PPP interface and the `ip vrf forwarding <vrf name>` under the pseudowire class configuration.
If you need to debug the L2TP tunnel session you can do this by using `debug ppp negotiation`. This Cisco article has additional details about the debugging messages.
https://www.cisco.com/c/en/us/support/docs/wan/point-to-point-protocol-ppp/25440-debug-ppp-negotiation.html
